11 May 2005
Financial experts have today called for decisive action to be implemented in order to cease the widespread negligent loan lending policies operated by a growing number of personal loan suppliers in the UK.
The lobbying follows a leaked internal audit revealing how Lloyds TSB issued thousands of loans to customers it knew would struggle to meet repayments.
Head of personal finance at uSwitch.com Nick White described the situation as "extremely worrying" adding that the finding is made more of a concern "as consumer borrowing via unsecured personal loans has already soared to record levels".
Mr White said: "Commission-based sales systems drive mis-selling and irresponsible loan lending and need to be regulated.
"The banking industry has a responsibility to ensure that customers understand the products that they are being sold, and also help people find the best solution for a particular situation.
"Unfortunately this is not always the case and providers often rely on consumers' lack of knowledge to increase their profits."
And although consumers can help themselves by shopping around for a personal loan to find the best deal, responsibility for this disconcerting situation should be of a higher priority for the government, according to uSwitch.
"The government really must address the failures that have allowed banks to lend irresponsibly and fuel unsustainable levels of borrowing," Mr White concluded.
Use uSwitch.com's free and impartial loan comparison calculator to find the loan to suit you.
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